Inter Parfums downgrades estimates on strength of US dollar
The company today said that it has revised its guidance for the full year 2008, stating that expected sales for the full year would reach $445m, as opposed to original estimates of $460m, whereas profit estimates are down from $26.8m to $25m.
In addition to the strength of the US dollar, the company has also been hit hard by challenging economic conditions that have affecting consumer spend in its key markets.
Euro slumps agains dollar
“Our revised 2008 guidance reflects the recent sustained strength of the U.S. dollar against the euro, particularly over the last six weeks which has affected our growth rate in sales,” said Russell Greenberg, Inter Parfums CFO.
“We previously expected that the strength of our brands and new product launches would enable us to reach our previously issued guidance. However, the very challenging economic environment that has manifested over the last few weeks brings doubt to that expectation.”
Greenberg did point out that the underlying results looked better, stressing that sales growth in dollar terms was likely to increase by around 5 per cent.
Europe a key market
Europe is a key market for the company and big gains in the dollar at the expense of the Euro have led to a significant reduction in reported sales once the exchange rates are taken into account.
However, Inter Parfums also pointed out that the stronger dollar is likely to have a positive impact on the company’ s results during the course of 2009, particularly bearing in mind that approximately one third of its sales in Europe are to US customers.
The company believes that the favorable exchange rates will translate into a bigger spend by the US customers as the year unfolds.